5 Best Intraday Trading Strategies - 2023

Created : January 10, 2023 Author : Samco Securities Category : Samco account help & support, Basics of stock market, Everything about Investing

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[caption id="attachment_23177" align="aligncenter" width="741"] 5 Best Intraday Trading Strategies - 2023[/caption] The market is a fascinating place where each day brings with it many nail-biting moments and uncertainty. In this case, one has to be responsible and informed to trade. Times are more technologically-driven now, and equity markets are more accessible to traders now. Thus, they can obtain information easily at a low cost. Now it is more convenient for them to know what are successful intraday trading strategies to earn profits. An avid trader must take advantage of the concept of intraday trading. Intraday stocks of companies like Godrej Industries, Reliance Industries, HDFC Life Insurance Company, Hindalco Industries and Paytm are considered some of the best companies that draw the attention of investors. In fact, market experts regularly release updates on intraday trading strategies that investors can make as per the market trends. This article aims to give you a better understanding of what intraday trading is, what some of the best strategies practiced by successful intraday traders are and how you can trade as a beginner.

An Overview: Intraday Trading

Intraday trading is a trading method that comes into the picture when individuals buy and sell stocks or equities on the same day when they are released. The motive for the same is to earn financial gains; that is, investors square off their financial positions before the market closes with the hopes of earning a profit. Since the time difference between buying and selling shares is very less, the risk and volatility are much higher as compared to regulator equity investments. Thus, it is important that if you are trading, you use reliable intraday trading strategies formulae to fulfill your financial goals and expectations from intraday trading.

Some Intraday Trading Rules to Keep in Mind

Before we begin with the discussion of the strategies, here are some rules to keep in mind:

Research thoroughly to understand which stocks to pick that have high liquidity.
Identify stocks that are ideal for intraday trading
Trade with funds that you can afford so that if there is a loss, it does not affect your financial standing
Plan your intraday trading strategies and stick to them only.
Make sure to close all open positions.
Keep track of your financial gains and losses by keeping an accounting book.

Learning About Successful Intraday Trading Strategies

It is important to note that you must know a number of intraday trading strategies since the success or failure of either of them depends on the market conditions. What might be appropriate to apply on one day might not be that suitable for the next day. Further, the kind of intraday trading strategy also depends on the trading style of a trader.

1. Momentum trading strategy:

This intraday trading method is based on taking advantage of market momentum, giving it its name. Investors are supposed to closely monitor appropriate stocks or those they want to invest in before a substantial change in the market trend occurs. Depending on these changes, traders buy or sell assets on the same day. The selection of a stock is influenced by recent events, quarterly profits, takeover announcements and other factors. Momentum Strategy is known to be one of the most successful intraday trading strategies in India and is also a very popular one. However, it is crucial for intraday traders to be updated about stock news and updates. Our platform provides you with recent, verified and authentic information on intraday stocks released everyday. It is also wise for intraday traders to respond in a timely manner because of the many external factors that affect share prices. The time for which they should keep their shares depends on the market's momentum. One way to determine if the momentum or trend is still present is to apply the 50 period simple moving average.

2. Gap and go strategy:

When the stock or index opens with a gap up (higher than the previous day's high) or gap down (lower than the previous day's low), this method can be relied upon. When a gap occurs, the stock market displays a potential reversal sign that can be seen by an occurrence of high volume (volume refers to the amount of the security traded during the course of a day.) As the gap opens and you wish to make a profit, you can use this approach to find out which equities have no pre-market volume. Through this, you will know which equities have prices different from their closing prices from a day before. Intraday traders can buy these shares if they think that the gap will decrease before the market closes. The advantages of this strategy as one of the very successful intraday trading strategies are-

Small losses and big profits
No need to trade each day

3. Breakout Trading Strategy:

As discussed earlier, buying and selling securities on the same day largely depends on the timing. As one of the most reliable intraday trading strategies, breakout strategy fulfills this purpose. This strategy is helpful in choosing high-quality intraday equities. In this technique, traders focus on equities that move above or below predetermined levels with increase in volume. These levels are known as resistance and support levels. Once the price crosses the resistance levels, it keeps increasing. In this case, traders can initiate long positions or buy shares. Similarly, traders can initiate a short position or sell the shares if the price drops below support levels based on the assumption that the price will continue to decline. This strategy is named so because traders are required to identify the breakout or threshold point at which the share prices continue to rise or fall. The fundamental idea thus is that when share prices exceed the threshold point, the trend will continue, and volatility would increase simultaneously. This will cause the prices to go up and down.

4. Moving Average Crossover Strategy:

This strategy works quite well with trading stocks. The moving average crossover strategy through which the shift in momentum can be detected when stock prices move below or above the moving average. One needs to look for an uptrend, which is when share prices increase by more than the moving average. Downtrends, on the other hand, are when stock prices are lower than the moving average. Those willing to seek profits are advised by experts to take a long position or buy shares during an uptrend. Similarly, it is advised to traders to open short positions or sell their securities during a downtrend. The basic idea behind moving average crossover strategy is that smaller moving averages will track stock prices more closely than larger ones. This is followed by the idea that when crossover occurs, a small trend formation may develop until reverse crossover occurs. Moving averages are known to be a lagging indicator, therefore the crossover approach won't capture highs and lows very accurately. However, it can assist you in spotting trend formation and making trade decisions in that direction.

5. News Based Strategy:

News-based Trading is a traditional form of intraday trading. However, it is also used widely nowadays. This is one good option for intraday trading for beginners since they need not determine volume charts or stock prices. Instead, they can rely on information that will influence the prices. A firm statement about earnings or new products, a general economic announcement about interest rates or unemployment, a lot of rumors about what may or may not be happening in a particular industry, or none of the above may be used to convey the information. This information may include some announcement regarding new products or earnings, some generic information about interest rates or merely hearsay information about what may or may not be happening in the market. Thus, to find which information is important and reliable, you need some guidance and comprehension. Most traders relying on this information might lack specialized fundamentals of analytical research skills. However, they are also known to have sufficient knowledge about news or market updates that favor or offend marketers. As a result, traders usually follow different news outlets. Once a favorable opportunity arises, they buy or sell shares accordingly. The drawback of news trading strategy is that there can be few and far fewer positive happenings. More often than not, the buzz has already been included into the stock price by the time you see it. In order to pass the time as they wait for something to spark a little enthusiasm, many news traders turn to scalping (a short-term trading strategy through which traders profit from small price movements in an asset’s price, that is, profiting from the trade volumes instead of drawing maximum gains from individual trade). Thus, one word of caution must be stated here. You should be aware of the greater risk involved in news-based trade strategy as compared to other trading techniques. At the same time, it also offers substantial returns on investment in just one day.

Conclusion

There is no golden strategy for intraday trading. You can rely on whatever works best for you and suits the occasion. If you are looking to begin your journey with intraday trading, you are at the right place at Samco Securities. With our awarded platform, you can become a trader with just a few clicks. You can open a Demat account for free and trade at your convenience. Our program provides competitively-priced intraday subscription plans that follows after a simple and quick sign-up process.

FAQs - Frequently Asked Questions

Q1 What are successful intraday trading strategies in India? A1 It is difficult to determine which is the best strategy overall. Each strategy serves its purpose depending on the market conditions. Q2 Which is the best platform for intraday trading? A2 Our platform is an advanced, hassle-free and quick way to do intraday trading. It offers a stream of fresh intraday trading and investment ideas throughout the day. Q3 What must be kept in mind while trading? A3 Traders must remember to be patient with intraday trading. It requires them to act fast but with proper understanding of their actions. Q4 How to start intraday trading online? A4 You simply need to download our app and you can begin your trading journey with the seamless platform. Q5 Is intraday trading for beginners? A5 Intraday trading can be done by both first-timers and experienced traders once they get an understanding of intraday trading strategies.